A restaurant rumored to be a "famous eatery" that operates multiple branches in major Seoul commercial districts was caught disguising workers as freelancers.
The Ministry of Employment and Labor (MOEL) said on the 28th it had caught a large restaurant that applied a so-called "fake 3.3 contract," hiring workers as freelancers. This case is the first caught under the "fake 3.3" planned inspections that began in December last year.
A fake 3.3 contract refers to a contract form that treats compensation as business income and applies the business income tax rate (3.3%)—instead of earned income—in order to avoid enrollment in the four major social insurance programs and the application of labor-related laws, even though the person qualifies as a worker under the Labor Standards Act.
The establishment caught this time is a meat restaurant chain run by a CEO in their 30s with locations in Hongdae and Sinyongsan, among others. It reportedly surpassed 10 billion won in annual sales after gaining popularity on social media (SNS). Multiple complaints, including wage delays and petitions for inspections, led to its inclusion in the latest intensive inspection.
The inspection found the company had signed freelancer contracts with 38 of its 52 workers (73%) across six stores. In the process, it did not enroll them in the four major social insurance programs and failed to properly apply labor-related laws. Annual leave and overtime, night, and holiday premiums were not paid, and a total of 51 million won in wages was delayed for 65 people, including former employees. There were seven violations of the Labor Standards Act, including signing work contracts that exceeded the 52-hour workweek.
The Ministry of Employment and Labor (MOEL) issued corrective orders to the establishment and imposed 2.4 million won in fines for failing to retain documents related to employment contracts. It also notified relevant agencies of the failure to enroll in the four major social insurance programs and plans to proceed with ex officio enrollment in employment and industrial accident insurance and retroactive premium assessments. The issue of tax filing errors was reported to the National Tax Service.
Minister Kim Young-hoon of the Ministry of Employment and Labor (MOEL) said, "We confirmed the reality that workers' rights are being violated through fake 3.3 contracts," and added, "As the harm is concentrated among young people, we will work to eradicate it." The Ministry of Employment and Labor (MOEL) will continue nationwide planned inspections on "fake 3.3" and prepare eradication measures in the first half of the year.